BT has clearly stepped into the ring to address some of the limitations of rolling out its fibre broadband network, particularly to more remote parts of Britain. It has previously said that homes and businesses that are harder to reach with a fixed fibre line would be connected using alternative new broadband technologies.

The national telco will be bidding alongside the six other 4G wannabes to bag new capacity to deploy mobile broadband services across the country. The 4G spectrum is expected to boost the amount of airwaves available to mobile devices by more that 75 per cent, Ofcom said.

The watchdog's chief Ed Richards said the 4G bidding war would be a "competitive process that will dictate the shape of the UK mobile phone market for the next decade and beyond".

Two separate bands - 800MHz and 2.6GHz - are up for grabs, Ofcom said.

The Chancellor of the Exchequer George Osborne could be left with something of a bloodied nose after indicating in his Autumn Statement late last month that the auction could raise as much as £3.5bn for the public purse and thereby ensure a fall in the country's deficit for 2012. However, Ofcom has in fact set a reserve price of £1.3bn, far short of the Treasury's estimates.

Returning to the auction, EE arguably has something of a march on its competitors, after the regulator approved an application by the firm in August this year to use its existing 1800MHz spectrum to deliver 4G services. It became commercially available in major Blighty cities in late October, but coverage remains patchy while it builds out its network.

O2 and Vodafone, meanwhile, have to await the outcome of Ofcom’s frequency auctions before they can roll out their own 4G services. The companies recently complained to Ofcom about EE's temporary monopoly of the spectrum by grumbling that the decision was anti-competitive. ®